Hydrogen 2021: A Roadmap to Net Zero - Black & Veatch
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Hydrogen 2021: A Roadmap to Net Zero
Enabling the New
Hydrogen Economy
As the world recognizes the growing impacts of climate change,
there is a sense of urgency to accelerate the transition to energy,
transport and industrial systems with fewer greenhouse gas
emissions and effectuate more sustainable modes of production
and consumption.
To enable this transition, new energy carriers will be needed
to transfer the increased levels of decarbonized energy
to consumers, without impacting the quality of service to
residential, industrial and transportation users. Hydrogen offers
a versatile solution and is emerging as an increasingly important
energy vector for decarbonized fuel sources, as well as for the
storage and transport of renewable energy.
Hydrogen is expected to play a critical role in decarbonizing
power generation and transport, heating domestic and
commercial buildings, and supporting industrial feedstock and
industrial processes — including hard-to-abate sectors such as
steel, refining, cement and agriculture.
Converted
Hydrogen to Carriers
Production
& Storage
Hydrogen NH3 Agriculture
Storage LOHCs
Electrolysis Blue Power
Green Hydrogen Hydrogen Generation
Production Production
Carriers Converted
to H2 at Destination
Distribution
Hub
Grid Nuclear Hydroelectric Renewables
Residential & Commercial
Ground Renewable Water Water
Water Water Desalination Pretreatment
Commercial
& Industrial
Industry CO2 Applications
CCUS
Convert to Fuel Cell Vehicles
Gas Oil Coal
Synthetic Fuels
Feedstocks
Hydrogen can play a critical
role in decarbonizing
processes across sectors
HYDROGEN 2021: A ROADMAP TO NET ZERO | 2
into hydrogen production and one-third into
hydrogen storage, transport and distribution.
Around one-quarter of the investment, according
to the Hydrogen Council, is likely to be destined
for product and series development, and scale-up
of manufacturing supply. The remainder could
go into new business models such as fuel-cell-
powered taxi fleets and car sharing.
Broadly speaking, the most significant short- to
Decarbonization medium-term applications of hydrogen-based
decarbonization are:
Uncertainties ● In power generation, hydrogen is one of the
leading options for storing renewable energy, and
Although many organizations are enthusiastically hydrogen and ammonia are about five years away
pursuing decarbonization as a goal, it remains from feasible use in conventional power plants to
unclear exactly how they plan to achieve their increase power system flexibility
Net Zero commitments; or in many cases, how ● Transitioning to clean hydrogen through
to begin moving decarbonization planning electrolysis or carbon capture for industrial use –
the element’s dominant current application – in
from concept to implementation. This is true
oil refining, production of ammonia, methanol and
for organizations who already see hydrogen
steel
playing an active role in their plans, and for
● End-of-journey refueling stations for municipal
those considering other technologies. For most vehicle fleets and medium- and heavy-duty
organizations, however, the growing recognition commercial vehicles; extension of refueling
of hydrogen’s potential makes it likely that the infrastructure for domestic vehicles
element will touch most decarbonization plans, ● Blending hydrogen into existing natural gas
either directly or indirectly. networks for heating commercial and domestic
buildings, initially in high density or multiple
By 2050, according to the Hydrogen Council, occupancy environments
hydrogen could meet 18 percent of the world’s It is important to understand that, especially in
final energy demand; facilitated in part by the cost terms of technology, few of these investments
of green and blue hydrogen production dropping will be pure-play hydrogen. As well as hydrogen
by up to 60 percent over the coming decade. This expertise, many decarbonization programs will
is due to the falling costs of renewable electricity require an understanding of a mix of renewable
generation, the developing economies of scale in energy generation assets — most commonly
electrolyzer manufacturing and the development solar and on and off-shore wind — coupled
of cheaper carbon sequestration infrastructure. to battery storage; smart power distribution
insights; and expertise in conventional gas-fired
Participating in the Hydrogen Economy power generation and natural gas distribution
Achieving the hydrogen economy outlined networks. In addition to integrating multiple
above will, the council believes, require annual technologies to facilitate sector coupling, such
investments of US$20-25 billion until 2030; programs will often require expertise in the
with roughly 40 percent of investments going successful integration of new and legacy assets.
HYDROGEN 2021: A ROADMAP TO NET ZERO | 3
Why Have a
Decarbonization
Roadmap?
Investments in decarbonization and the
hydrogen economy will continue to grow,
even as they vary significantly in nature and
scope, and will not conform to a one-size-fits-
all strategy. Each investment group and each
organization within that group will need to plan
according to their own business goals, needs
and individual circumstances. According to
Black & Veatch’s 2021 Corporate Sustainability,
Goal Setting and Measurement Report, more
than 80 percent of companies surveyed with
revenues greater than US$250 million have set
decarbonization goals, yet 25 percent have set
32%
goals at such a level that they are unsure how
they will meet them.
It is also clear that although many organizations Set conservative goals with full
are committed to decarbonization, they lack knowledge of how they will
the strategic decarbonization roadmap that achieve them
will guide them to that goal. As more and more
organizations consider their decarbonization
goals, regardless of their revenue or size, the
quality of their initial strategic decarbonization
roadmap will significantly impact the return
on their hydrogen investments and ability to
compete and thrive in a decarbonized future.
80%
80 percent of companies
surveyed with revenues greater
than US$250 million have set
25% decarbonization goals
Of those, have set goals
at such a level that they
are unsure how they will
meet them
42%
Of them set goals and
believe technology advances
and cost reductions will help
them meet them in time
HYDROGEN 2021: A ROADMAP TO NET ZERO | 4It’s not just about technology
Given that many organizations have made
aggressive decarbonization commitments
without a clear path, success will require them
to now undertake broad-based strategic road-
mapping programs that encompass investments
in energy efficiency, renewable energy and
other new technologies, many of which will
have a direct or indirect hydrogen component.
But a strategic roadmap that focuses solely
on technology is insufficient; an
effective strategic decarbonization
roadmap has to be multi-
dimensional and address a host of
other factors which will influence,
and be influenced by, technology
alternatives. Organization
Technology
Changes
Many of the factors the roadmap
needs to encompass are common to
supply-side organizations — those seeking
to support decarbonization through
the provision of renewable energy or Adaptability
green hydrogen; and organizations on
the demand-side seeking to meet their
decarbonization targets through the
adoption of low-carbon technologies. As
the drive for decarbonization continues to gain Investments
momentum, we are seeing the increased blurring
of the distinction between supply and demand-
side organizations.
An effective strategic Strategic
decarbonization roadmap has to Goals
be multi-dimensional and address
a host of other factors which will
influence, and be influenced by,
Resource
technology alternatives. Requirement
HYDROGEN 2021: A ROADMAP TO NET ZERO | 5decarbonization can influence business models.
Identify the For example, developers of renewable energy
infrastructure, like wind and solar, who choose
Possible, Accept to add a green hydrogen component to their
Uncertainty portfolio will be able to sell gas as well as
electricity — molecules as well as electrons. This
may have a profound impact on where they can
Getting started on a decarbonization roadmap
be most profitable.
can be complex. Decarbonization is a long-
term undertaking — looking potentially up to Similarly, the introduction of hydrogen will enable
30 years into the future. To help manage this, the developer to move into long-term energy
the roadmap will need to identify low-hanging storage. While battery storage is effective in the
fruit, address the art of the possible, and also short term, hydrogen can convert and store
accept uncertainty. Adaptability has to be built solar energy generated in the shoulder seasons
into the plan, often with pre-set breakpoints when generation exceeds demand, for instance,
to assess progress and reflect on changes and for flexible and continuous dispatch during the
developments that will influence the roadmap’s peak seasons when demand exceeds generation.
future evolution. This approach avoids Places that were not traditionally fuel hubs can
analysis paralysis in the face of demanding now become one. Renewable energy companies
decarbonization targets. can move into the gas sector, just as oil and gas
giants enter the renewable energy space. Supply
Another important starting point is to address
chains, partnerships and solutions will all evolve
the potential organizational changes. It is vital
as a result. The profound organizational changes
to understand that decarbonization will not be
such tectonic shifts potentially create need to
cost-effective for all organizations, especially
be incorporated into the heart of the strategic
in the short term. The organizational mindset
decarbonization roadmap.
may need to change to accommodate this.
It is also vital to start to map resources to
requirements to see what can be done in-house,
and where external partners will be necessary.
The key is understanding the extent to which
HYDROGEN 2021: A ROADMAP TO NET ZERO | 6Chart the Regulatory Landscape
Achieving an effective strategic decarbonization tied to rates of emission and concentration. A
roadmap means navigating a fluid, interlinked strategic decarbonization roadmap will need
web of dependencies. Among the most influential to be cognizant of this, as well as the incentives
factors, especially in the near term when there is available to those reducing their CO2 emissions
not always a nexus of decarbonization goals and when setting out the pace and cost assumptions
profitability, is the regulatory landscape. of achieving Net Zero goals.
At the international level, and in the U.S. at the California, usually a good bellwether, provides
federal and state level, the regulatory landscape potential insight into the type of decarbonization
features hurdles and incentives that need to be incentives an effective strategic roadmap needs
accounted for in the strategic decarbonization to incorporate. An executive order mandates 200
roadmap. In Western Europe and Japan, for hydrogen fueling stations by 2025, supported
instance, decarbonization beyond transition to by grants to build these hydrogen fueling
renewable energy is more advanced than in the stations. For organizations considering investing
US largely due to initiatives instigated or strongly in green hydrogen production as part of their
supported by national governments. decarbonization plan the prospect of low-carbon
fuel standards, and solar credits make the
In the U.S., the same technical solution will state’s transportation market a more attractive
have very different commercial effects,
option. In addition, for organizations wishing to
depending upon which regulatory incentives decarbonize their vehicle fleet using hydrogen,
and disincentives apply at the state level. There California offers a more economical option than
is a growing acceptance that there will be a other states.
cost associated with emissions of CO2, likely
HYDROGEN 2021: A ROADMAP TO NET ZERO | 7
| 7The evaluation of commercially ready and
Technology in emerging decarbonization technologies then
needs to be overlaid with an assessment of
Context the extent, if any, to which these technologies
already feature in an organization’s
Establishing which decarbonization technologies
decarbonization roadmap or current long-term
are best suited to delivering an organization’s
plans. From this, the picture of the potentially
decarbonization goals is inextricably interdependent
most appropriate decarbonization technologies
on factors such as developing an understanding
will form. This should be refined through further
of organizational change and the regulatory
evaluation to create a current assessment of
landscape. None of these elements in isolation will
each potentially suitable technology’s projected
give rise to an effective strategic decarbonization
development timeline, grid impact, costs,
roadmap. The technology-focused component of the
benefits, risks, peer activities and the feasibility of
strategic roadmap needs to address a wide range
developing at scale, for example.
of business context, performance, CAPEX and OPEX
considerations. The other work such as the organizational
change and regulatory landscape assessments,
Accurate data gathering is required to develop
and assessments of the costs of hydrogen
the base case assumptions that will be
and other renewable fuels over the planning
reflected in the roadmap. Initial data gathering
timeframe, will be interpolated with the technical
includes assessing the organization’s supply
assessments to develop a rounded technology
and/or demand-side energy production/
core for the roadmap.
consumption and CO2 emissions, with the
nature of the assessment depending upon Technology is at the leading edge of the
whether the organization is pursuing scope energy transition to Net Zero. As a result, a
1, 2 or 3 decarbonization goals. This needs decarbonization strategic roadmap that lacks
to be mapped to an assessment of the a detailed technology core will be insufficient.
organization’s existing and future generating The most complete strategic decarbonization
resources and consumption activities – roadmaps — and thus those most likely
including owned generation as well as power to deliver — will intermesh business goals
purchase agreements. The assessment also with high quality, accurate market and
has to incorporate the organization’s fuel price regulatory analysis; and first-hand expertise
projections and CAPEX and OPEX estimates. in decarbonization technology solutions in the
power generation, power transmission, fuel
The next step is to identify the commercially
and chemicals and transportation sectors. The
ready and emerging technologies available over
most complete analysis will come from partners
the next 30 years that could be employed to
with expertise in strategic consulting and the
reach the organization’s decarbonization goals.
myriad technology solutions, including hydrogen
This requires the technical competence and in-
and renewable energy generation that are
depth knowledge to:
available and relevant, as well as the complex
Identify the likely timeline of these technologies
interfaces between them that define successful
●
● Identify the likely cost curve of these technologies decarbonization road mapping.
● Identify the resiliency characteristics of these
technologies
● Prioritize technologies based on cost, risk,
availability and opportunity to scale as options to
help the organization’s decarbonization goals
● Identify the signposts in terms of productivity
and costs as part of the road map for business
decisions
HYDROGEN 2021: A ROADMAP TO NET ZERO | 8Real-World
Considerations
HyNet North West, a regional-scale low-carbon
cluster in northwest England, gives an idea of the
considerations and interfaces hydrogen-based
decarbonization programs need to navigate.
A new plant at Ellesmere Port’s Stanlow Refinery
will produce 3TWh per year of blue hydrogen
from natural gas. The hydrogen will be used
as fuel at the refinery and distributed via
new pipelines to local industrial sites — and
potentially power stations. The hydrogen will
also be blended up to 20 percent with natural
gas in the local distribution network supplying
two million customers in and around Liverpool,
Manchester, Warrington, Wigan and North
Cheshire. This will allow up to 400,000 tons per
year of CO2 to be captured from the hydrogen
plant and industrial sites.
As well as offering the right scale of industrial
and domestic customers for the hydrogen, and
site for the refinery, the industrialized areas of
Deeside and Merseyside chose for HyNet also
offered CO2 storage in depleted gas reservoirs
under Liverpool Bay; and salt caverns for
safe hydrogen storage. Existing natural gas
pipelines will be repurposed to convey the CO2
to storage. In terms of regulatory landscape
financial incentives from both central and local
government are central to HyNet’s business plan.
HyNet is an example of some of the many
strategic decarbonization road-mapping
considerations that supply-side hydrogen
projects need to address: demand; interfaces
with new and existing assets; suitability and
availability of land for hydrogen generation
and CO2 storage assets; attractive regulatory
landscape. Many of these considerations will be
shared by demand-side initiatives.
Once operational a new plant
producing blended hydrogen of up
to 20 percent with natural gas will
supply two million customers in and
around Northwest England.
HYDROGEN 2021: THE PATH TO NET ZERO BECOMES CLEARER | 9To Learn More
For more information visit bv.com/hydrogen
Black & Veatch is an active industry advocate for the hydrogen economy including
membership of the Hydrogen Council, Fuel Cell Hydrogen & Energy Association, California
Hydrogen Business Council, Center for Hydrogen Safety, and Ammonia Energy Association.
HYDROGEN 2021: A ROADMAP TO NETZERO
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